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Delaware		3334		94-3030279
(State or Other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

27422 Portola Parkway, Suite 350 Foothill Ranch, California 92610-2831 (949) 614-1740 (Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)		John M. Donnan Vice President, General Counsel and Secretary Kaiser Aluminum Corporation 27422 Portola Parkway, Suite 350 Foothill Ranch, California 92610-2831 (949) 614-1740 (Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent for Service)

Troy B. Lewis Mark T. Goglia Jones Day 2727 North Harwood Street Dallas, Texas 75201-1515 Telephone: (214) 220-3939 Facsimile: (214) 969-5100		Joseph A. Hall Davis Polk & Wardwell 450 Lexington Avenue New York, New York 10017 Telephone: (212) 450-4000 Facsimile: (212) 450-4800

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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

PRELIMINARY PROSPECTUS	Subject to Completion	January 12, 2007

		Per share				Total
Public offering price		$				$
Underwriting discounts and commissions		$				$
Proceeds, before expenses, to the selling stockholders		$				$

UBS Investment Bank	Bear, Stearns & Co. Inc.

Lehman Brothers	Lazard Capital Markets

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Prospectus summary			1
Risk factors			10
Special note regarding forward-looking statements			23
Use of proceeds			24
Dividend policy			24
Price range of common stock			24
Capitalization			25
Selected historical consolidated financial data			26
Management’s discussion and analysis of financial condition and results of operations			29
Recent reorganization			59
Industry overview			62
Business			66
Management			76
Principal and selling stockholders			135
Certain relationships and related transactions			138
Description of capital stock			139
Shares eligible for future sale			148
U.S. federal tax consequences to non-U.S. holders of common stock			150
Underwriting			153
Notice to investors			156
Legal matters			157
Experts			157
Where you can find more information			157
Index to consolidated financial statements			F-1
Form of Underwriting Agreement
Consent of Deloitte & Touche LLP

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•	Index-based price. Some of our customers pay a product price that incorporates an index-based price for primary aluminum such as Platt’s Midwest price for primary aluminum. This pricing mechanism also typically allows us to pass commodity price risk to the customer.
•	Fixed price. Some of our customers pay a fixed price. During 2003, 2004, 2005 and the nine months ended September 30, 2006, approximately 97.6 million pounds (or approximately 26%), 119.0 million pounds (or approximately 26%), 155.0 million pounds (or approximately 32%) and 153.0 million pounds (or approximately 38%), respectively, of our fabricated products were sold at a fixed price. We bear commodity price risk on fixed-price contracts, which we normally hedge though a combination of financial derivatives and production from Anglesey Aluminium Limited, described below.

•	Leading market positions in value-added niche markets for fabricated products. We have repositioned our business to concentrate on products in which we believe we have strong production capability, well- developed technical expertise and high product quality. We believe that we hold a leading market share position in niche markets that represented approximately 85% of our 2005 net sales from fabricated aluminum products. Our leading market position extends throughout our broad product offering, including plate, sheet, seamless extruded and drawn tube, rod, bar, extrusions and forgings for use in a variety of value-added aerospace, general engineering and custom automotive and industrial applications.
•	Well-positioned growth platform. We have substantial organic growth opportunities in the production of aluminum plate, extrusions and forgings. We are in the midst of a $105 million expansion of our Trentwood facility that will allow us to significantly increase production capacity and enable us to produce thicker gauge aluminum plate. We also have the ability to add presses and other manufacturing equipment at several of our current facilities in order to increase extrusion and forging capacity. Additionally, we believe our platform and financial strength provide us with flexibility to create additional stockholder value through selective acquisitions.
•	Supplier of choice. We pursue “best-in-class” customer satisfaction through the consistent, on-time delivery of high quality products on short lead times. We offer our customers a portfolio of both highly engineered and industry standard products that is unmatched in breadth and depth by most of our competitors. Our continuous improvement culture is grounded in our production system, the Kaiser Production System, which involves an integrated utilization of application and advanced process engineering and business improvement methodologies such as lean enterprise, total productive maintenance and six sigma. We believe that our broad product portfolio of highly engineered products and the Kaiser Production System, together with our established record of product innovation, will allow us to remain the supplier of choice for our customers and further enhance our competitive position.
•	Blue-chip customer base and diverse end markets. Our fabricated products customers include leading aerospace companies, automotive suppliers and metal distributors, such as A.M. Castle-Raytheon, Airbus Industrie, Boeing, Bombardier, Eclipse Aviation, Reliance Steel & Aluminum and

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	Transtar-Lockheed Martin. We have long-term relationships with our top customers, many of which we have served for decades. Our customer base spans a variety of end markets, including aerospace and defense, automotive, consumer durables, machinery and equipment, and electrical.
•	Financial strength. We have little debt and significant liquidity as a result of our recent chapter 11 bankruptcy reorganization. We also have net operating loss carry-forwards and other significant tax attributes that may reduce our future cash payments of U.S. income tax. We previously disclosed our belief that these tax attributes could together offset in the range of $555 to $900 million of otherwise taxable income, and we currently anticipate that, upon completion of our 2006 income tax return analysis, the amount of our tax attributes as of December 31, 2006 will likely be in the upper half of that range.
•	Strong and experienced management. The members of our senior management team have, on average, 20 years of industry work experience, particularly within the areas of operations, technology, marketing and finance. Our management team has repositioned our fabricated products business and led us through our recent chapter 11 bankruptcy reorganization, creating a focused business with financial and competitive strength.

•	Pursue organic growth. We will continue to utilize our manufacturing platform to increase growth in areas where we are well-positioned such as aluminum plate, forgings and extrusions. For instance, we anticipate that the expansion of our Trentwood facility will enable us to significantly increase our production capacity and enable us to produce thicker gauge aluminum plate, allowing us to capitalize on the significant growth in demand for high quality heat treat aluminum plate products in the market for Aero/ HS products. Further, our well-equipped extrusion and forging facilities provide a platform to expand production as we take advantage of opportunities and our strong customer relationships in the aerospace and industrial end markets.
•	Continue to differentiate our products and provide superior customer support. As part of our ongoing supplier of choice efforts, we will continue to strive to achieve “best-in-class” customer satisfaction. We will also continue to offer a broad portfolio of differentiated, superior-quality products with high engineering content, tailored to the needs of our customers. For instance, our unique T-Form® sheet provides aerospace customers with high formability as well as requisite strength characteristics, enabling these customers to substantially lower their production costs. Additionally, we believe our Kaiser Select® Rod established a new industry benchmark for quality and performance in automatic screw applications. By continually striving for “best-in-class” customer satisfaction and offering a broad portfolio of differentiated products, we believe we will be able to maintain our premium product pricing, increase our sales to current customers and gain new customers, thereby increasing our market share.
•	Continue to enhance our operating efficiencies. During the last five years, we have significantly reduced our costs by narrowing our product focus, strategically investing in our production facilities and implementing the Kaiser Production System. We will continue to implement additional measures to enhance our operating efficiency and productivity, which we believe will further decrease our production costs.
•	Maintain financial strength. We intend to employ debt judiciously in order to remain financially strong throughout the business cycle and to maintain our flexibility to capitalize on growth opportunities.
•	Enhance our product portfolio and customer base through selective acquisitions. We may seek to grow through acquisitions and strategic partnerships. We will selectively consider acquisition opportunities that we believe will complement our product portfolio and add long-term stockholder value.

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•	acts of war or terrorism or the threat of war or terrorism;
•	government regulation in the countries in which we operate, service customers or purchase raw materials;
•	the implementation of controls on imports, exports or prices;
•	the adoption of new forms of taxation;
•	the imposition of currency restrictions;
•	the nationalization or appropriation of rights or other assets; and
•	trade disputes involving countries in which we operate, service customers or purchase raw materials.

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•	diversion of management’s time and attention from our existing business;
•	challenges in managing the increased scope, geographic diversity and complexity of operations;
•	difficulties in integrating the financial, technological and management standards, processes, procedures and controls of the acquired business with those of our existing operations;
•	liability for known or unknown environmental conditions or other contingent liabilities not covered by indemnification or insurance;
•	greater than anticipated expenditures required for compliance with environmental or other regulatory standards or for investments to improve operating results;

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•	difficulties in achieving anticipated operational improvements;
•	incurrence of additional indebtedness to finance acquisitions or capital expenditures relating to acquired assets; and
•	issuance of additional equity, which could result in further dilution of the ownership interests of existing stockholders.

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•	volatility in the spot market for primary aluminum and energy costs;
•	our annual accruals for variable payment obligations to the Union VEBA Trust and Salaried Retiree VEBA Trust (see Note 7 to our interim consolidated financial statements);
•	non-cash charges including last-in, first-out, or LIFO, inventory charges and impairments;
•	global economic conditions;
•	unanticipated interruptions of our operations for any reason;
•	variations in the maintenance needs for our facilities;
•	unanticipated changes in our labor relations; and
•	cyclical aspects impacting demand for our products.

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•	the effectiveness of managements’ strategies and decisions;
•	general economic and business conditions, including cyclicality and other conditions in the aerospace and other end markets we serve;
•	developments in technology;
•	new or modified statutory or regulatory requirements;
•	changing prices and market conditions; and
•	the other factors discussed under “Risk factors.”

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•	we are not in default or would not be in default as a result of the dividend; and
•	the amount of the dividends, together with the aggregate amount of all other dividend payments made by us after July 6, 2006, is less than the sum of (1) 50% of our net income for the period from July 6, 2006 to the end of our most recently ended fiscal quarter or if such net income is a deficit, less 100% of such deficit, (2) up to 100% of the proceeds to us from the sale or issuance of any of our equity securities remaining after making any mandatory prepayment under the revolving credit facility and term loan facility from the proceeds, provided that the proceeds are not used to make any investments or other dividend payments, and (3) $2.0 million.

		High				Low
2006:
Third Quarter 2006 (from July 7, 2006)		$	51.00			$	36.50
Fourth Quarter 2006		$	63.00			$	43.00
2007:
First Quarter 2007 (through January 11, 2007)		$	59.30			$	57.18

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				As of
				September 30,
				2006
(dollars in millions, except share and per share amounts)
Cash and cash equivalents				$	52.7
Debt, including current portion
	Revolving credit facility			$	—
	Term loan facility				50.0
	Other				—
		Total debt			50.0
Stockholders’ equity:
	Common stock, $0.01 par value, 45,000,000 shares authorized; 20,525,660 shares issued and outstanding(1)				0.2
	Additional capital				482.5
	Retained earnings				14.3
	Common stock owned by the Union VEBA Trust subject to transfer restrictions, at reorganization value, 6,291,945 shares at September 30, 2006(2)				(151.1	)
		Total stockholders’ equity			345.9
		Total capitalization		$	395.9

(1)	Excludes 1,696,562 shares of common stock reserved and available for issuance under our equity incentive plan.
(2)	See Note 7 to our interim consolidated financial statements for a discussion of the treatment of the Union VEBA Trust’s shares that are subject to transfer restrictions.

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																												Nine months ended
																												September 30, 2006
																												Predecessor
																								Predecessor				period from				Period from
				Predecessor																				nine months				January 1,				July 1, 2006
				year ended December 31,																				ended				2006				through
																								September 30,				to July 1,				September 30,
Statements of income data:				2001(1)				2002				2003				2004				2005				2005				2006				2006
(dollars in millions, except share and per share data)
																								(unaudited)				(unaudited)				(unaudited)
																								(restated)(2)
Net sales				$	889.5			$	709.0			$	710.2			$	942.4			$	1,089.7			$	815.9			$	689.8			$	331.4
Costs and expenses:
	Cost of products sold				823.4				671.4				681.2				852.2				951.1				710.9				596.4				291.8
	Depreciation and amortization				32.1				32.3				25.7				22.3				19.9				15.0				9.8				2.8
	Selling, administrative, research and development, and general				93.7				118.6				92.5				92.3				50.9				38.0				30.3				18.0
	Other operating charges (credits), net(3)				30.1				31.8				141.6				793.2				8.0				6.5				0.9				(2.9	)
		Total costs and expenses			979.3				854.1				941.0				1,760.0				1,029.9				770.4				637.4				309.7
Operating income (loss)					(89.8	)			(145.1	)			(230.8	)			(817.6	)			59.8				45.5				52.4				21.7
Other income (expense):
	Interest expense(4)				(106.2	)			(19.0	)			(9.1	)			(9.5	)			(5.2	)			(4.2	)			(0.8	)			—
	Reorganization items(5)				—				(33.3	)			(27.0	)			(39.0	)			(1,162.1	)			(25.3	)			3,093.1				—
	Other, net				(68.7	)			(0.9	)			(5.2	)			4.2				(2.4	)			(1.5	)			1.2				0.9
Income (loss) before income taxes and discontinued operations					(264.7	)			(198.3	)			(272.1	)			(861.9	)			(1,109.9	)			14.5				3,145.9				22.6
Provision for income taxes					(523.4	)			(4.4	)			(1.5	)			(6.2	)			(2.8	)			(6.0	)			(6.2	)			(8.3	)
Minority interests					(0.2	)			—				—				—				—				—				—				—
Income (loss) from continuing operations					(788.3	)			(202.7	)			(273.6	)			(868.1	)			(1,112.7	)			8.5				3,139.7				14.3
Discontinued operations:
	Income (loss) from discontinued operations, net of income taxes, including minority interests				165.3				(266.0	)			(514.7	)			(5.3	)			(2.5	)			21.3				4.3				—
	Gain from sale of commodity interests				163.6				—				—				126.6				366.2				365.6				—				—
Income (loss) from discontinued operations(6)					328.9				(266.0	)			(514.7	)			121.3				363.7				386.9				4.3				—
Cumulative effect on years prior to 2005 of adopting accounting for conditional asset retirement obligations					—				—				—				—				(4.7	)			(4.7	)			—				—
Net income (loss)				$	(459.4	)		$	(468.7	)		$	(788.3	)		$	(746.8	)		$	(753.7	)		$	390.7			$	3,144.0			$	14.3
Earnings (loss) per share— basic(7):
	Income (loss) from continuing operations			$	(9.82	)		$	(2.52	)		$	(3.41	)		$	(10.88	)		$	(13.97	)		$	0.11			$	39.42			$	0.72
	Income (loss) from discontinued operations			$	4.09			$	(3.30	)		$	(6.42	)		$	1.52			$	4.57			$	4.85			$	0.05			$	—
	Loss from cumulative effect on years prior to 2005 of adopting accounting for conditional asset retirement obligations			$	—			$	—			$	—			$	—			$	(0.06	)		$	(0.06	)		$	—			$	—
	Net income (loss)			$	(5.73	)		$	(5.82	)		$	(9.83	)		$	(9.36	)		$	(9.46	)		$	4.90			$	39.47			$	0.72
Earnings (loss) per share—diluted(7):
	Income (loss) from continuing operations			$	(9.82	)		$	(2.52	)		$	(3.41	)		$	(10.88	)		$	(13.97	)		$	0.11			$	39.42			$	0.72
	Income (loss) from discontinued operations			$	4.09			$	(3.30	)		$	(6.42	)		$	1.52			$	4.57			$	4.85			$	0.05			$	—
	Loss from cumulative effect on years prior to 2005 of adopting accounting for conditional asset retirement obligations			$	—			$	—			$	—			$	—			$	(0.06	)		$	(0.06	)		$	—			$	—
	Net income (loss)			$	(5.73	)		$	(5.82	)		$	(9.83	)		$	(9.36	)		$	(9.46	)		$	4.90			$	39.47			$	0.72
Dividends per common share				$	—			$	—			$	—			$	—			$	—			$	—			$	—			$	—
Weighted average shares outstanding (in thousands):
	Basic				80,235				80,578				80,175				79,815				79,675				79,676				79,672				20,002
	Diluted				80,235				80,578				80,175				79,815				79,675				79,676				79,672				20,029

(footnotes on following page)

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		As of December 31,																				As of September 30,
Balance sheet data:		2001				2002				2003				2004				2005				2005				2006
(dollars in millions)
																						(unaudited)
																						(restated)(2)
Cash and cash equivalents		$	154.1			$	77.4			$	35.5			$	55.4			$	49.5			$	43.3			$	52.7
Working capital(8)			(44.2	)			183.0				104.9				73.0				119.7				85.6				212.1
Total assets			2,743.7				2,225.4				1,623.5				1,882.4				1,538.9				2,197.8				621.1
Long-term debt			678.7				20.7				2.2				2.8				1.2				1.2				50.0
Stockholders’ equity (deficit)			(441.1	)			(1,085.6	)			(1,738.7	)			(2,384.2	)			(3,141.2	)			(1,993.5	)			345.9

(1)	Statement of income data and balance sheet data for 2001 reflect our financial results and position prior to our filing for chapter 11 bankruptcy in February 2002. Such data includes the impact of our concluding a valuation allowance was required in respect of recorded tax attributes and from the partial sale of one of our commodity-related interests.
(2)	We restated our operating results for the nine months ended September 30, 2005. See Note 15 to our interim consolidated financial statements for information regarding the restatement.
(3)	Other operating charges (credits), net in 2003 and 2004 include certain significant charges associated with the termination of certain pension and post-retirement medical plans, a settlement in respect of a past labor matter and other items. These items are detailed in Note 6 to our audited consolidated financial statements and Note 10 to our interim consolidated financial statements.
(4)	Excludes unrecorded contractual interest expense of $84.0 million in 2002, $95.0 million in each of 2003, 2004 and 2005, $71.2 million for the nine months ended September 30, 2005 and $47.4 million for the period from January 1, 2006 to July 1, 2006.
(5)	Reorganization items for 2005 include an approximate $1.1 billion charge as a result of the value of an intercompany note treated as being for the benefit of certain creditors. See Note 1 to our audited consolidated financial statements. Reorganization items for the period from January 1, 2006 to July 1, 2006 include a gain of approximately $3.1 billion in connection with the implementation of our plan of reorganization and fresh start reporting. See Note 13 to our interim consolidated financial statements.
(6)	Income (loss) from discontinued operations includes the operating results associated with commodity interests sold as well as certain significant gains and losses associated with the dispositions. See Note 3 to our audited consolidated financial statements for information in respect of 2003, 2004 and 2005.
(7)	Earnings (loss) per share and share information prior to our emergence from chapter 11 bankruptcy may not be meaningful because, pursuant to our plan of reorganization, on July 6, 2006, all outstanding equity interests were cancelled without consideration.
(8)	Working capital represents total current assets, including cash, minus total current liabilities.

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•	all of our material pre-petition debt, pension and post-retirement medical obligations and asbestos and other tort liabilities, along with other pre-petition claims (which aggregated in our June 30, 2006 balance sheet to approximately $4.4 billion) were addressed and resolved; and
•	all of the equity interests of our pre-emergence stockholders were cancelled without consideration and our post-emergence equity was issued and delivered to a third party disbursing agent for distribution to certain claimholders.

•	We have adjusted our stockholders’ equity to equal the reorganization value of our company;
•	We have reset items such as accumulated depreciation, accumulated deficit and accumulated other comprehensive income (loss) to zero; and
•	We have allocated the reorganization value to our individual assets and liabilities based on their estimated fair value. Such items as current liabilities, accounts receivable, and cash reflect values similar to those reported prior to emergence. Items such as inventory, property, plant and equipment, long-term assets and long-term liabilities have been significantly adjusted from amounts previously reported. As more fully discussed in the notes to our financial statements, these adjustments may adversely affect our future results.

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																Nine months ended
				Year ended December 31,												September 30,
Operating data (unaudited)				2003				2004				2005				2005				2006
Shipments (millions of pounds):
	Fabricated products				372.3				458.6				481.9				365.2				399.7
	Primary aluminum				158.7				156.6				155.6				115.7				117.1
		Total			531.0				615.2				637.5				480.9				516.8
Average realized third party sales price (per pound):
	Fabricated products(2)			$	1.61			$	1.76			$	1.95			$	1.94			$	2.18
	Primary aluminum(3)			$	0.71			$	0.85			$	0.95			$	0.93			$	1.27
(footnotes on following page)

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																Nine months ended
				Year ended December 31,												September 30,
Statements of income data:				2003				2004				2005				2005				2006
(dollars in millions)
																(unaudited)
																(Restated)(1)
Net sales:
	Fabricated products			$	597.8			$	809.3			$	939.0			$	707.7			$	872.5
	Primary aluminum				112.4				133.1				150.7				108.2				148.7
		Total net sales		$	710.2			$	942.4			$	1,089.7			$	815.9			$	1,021.2
Segment operating income (loss)(1):
	Fabricated products(4)(5)			$	(21.2	)		$	33.0			$	87.2			$	66.3			$	90.3
	Primary aluminum(6)				6.7				13.9				16.4				13.4				15.2
	Corporate and other				(74.7	)			(71.3	)			(35.8	)			(27.7	)			(33.4	)
	Other operating credits (charges), net (7)				(141.6	)			(793.2	)			(8.0	)			(6.5	)			2.0
		Total operating income (loss)		$	(230.8	)		$	(817.6	)		$	59.8			$	45.5			$	74.1
Reorganization items(8)				$	(27.0	)		$	(39.0	)		$	(1,162.1	)		$	(25.3	)		$	3,093.1
Income (loss) from discontinued operations (9)				$	(514.7	)		$	121.3			$	363.7			$	386.9			$	4.3
Cumulative effect on years prior to 2005 of adopting accounting for conditional asset retirement obligation(10)				$	—			$	—			$	(4.7	)		$	(4.7	)		$	—
Net income (loss)(1)				$	788.3			$	(746.8	)		$	(753.7	)		$	390.7			$	3,158.3
Capital expenditures, net of accounts payable (excluding discontinued operations)				$	8.9			$	7.6			$	31.0			$	20.4			$	39.7

(1)	We restated our operating results for the nine months ended September 30, 2005. See Note 15 to our interim consolidated financial statements for information regarding the restatement.
(2)	Average realized prices for our fabricated products business unit are subject to fluctuations due to changes in product mix as well as underlying primary aluminum prices and are not necessarily indicative of changes in underlying profitability.
(3)	Average realized prices for our primary aluminum business unit exclude hedging revenues.
(4)	Operating results for the nine months ended September 30, 2005 include metal losses of $2.3 million. Operating results for the nine months ended September 30, 2006 include a non-cash LIFO inventory charge of $18.4 million and metal profits of approximately $13.9 million.
(5)	Includes non-cash mark-to-market losses of $1.5 million in the nine months ended September 30, 2006. For further discussion regarding mark-to-market matters, see Note 9 to our interim consolidated financial statements.
(6)	Includes non-cash mark-to-market gains (losses) totaling $(4.5) million and $8.1 million in the nine months ended September 30, 2005 and 2006, respectively. For further discussion regarding mark-to-market matters, see Note 9 to our interim consolidated financial statements.
(7)	Other operating credits (charges), net in 2003 and 2004 include certain significant charges associated with the termination of certain pension and post-retirement medical plans, a settlement in respect of a past labor matter and other items. These items are detailed in Note 6 to our audited consolidated financial statements.
(8)	Reorganization items for 2005 includes an approximate $1.1 billion charge as a result of the value of an intercompany note treated as being for the benefit of certain creditors. See Note 1 to

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	our audited consolidated financial statements. Reorganization items for the period from January 1, 2006 to July 1, 2006 includes a gain of approximately $3.1 billion in connection with the implementation of our plan of reorganization and fresh start reporting. See Note 13 to our interim consolidated financial statements.
(9)	Income (loss) from discontinued operations includes a substantial impairment charge in 2003 and gains in 2004 and 2005 in connection with the sale of certain of our commodity-related interests. See Note 3 to our audited consolidated financial statements.

(10)	See Note 2 to our interim consolidated financial statements for a discussion of the change in accounting for conditional asset retirement obligations.

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•	Metal profits in the nine months ended September 30, 2006 (before considering LIFO implications) of approximately $13.9 million, which is approximately $16.2 million better than the prior year period.
•	A non-cash LIFO inventory charge of $18.4 million in the nine months ended September 30, 2006. There were no LIFO charges or benefits in the comparable 2005 period.
•	Mark-to-market charges on energy hedging in the nine months ended September 30, 2006 were approximately $1.5 million. During the nine months ended September 30, 2005, there were no mark-to-market charges or gains.

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		Nine months ended
		September 30,
		2006 vs. 2005
		Operating				Better
Component		income				(worse)				Factor
Sales of production from Anglesey		$	38			$	15			Market price for primary aluminum
Internal hedging with fabricated products segment			(32	)			(29	)		Eliminates in consolidation
Derivative settlements			1				3			Impacted by positions and market prices
Mark-to-market on derivative instruments			8				13			Impacted by positions and market prices
		$	15			$	2

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•	$12 million and $18 million, respectively, for medical obligations and VEBA funding for all former and current operating units;
•	$16 million and $30 million, respectively, for reorganization costs; and
•	$30 million and $20 million, respectively, for general and administrative costs.

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						Payments due in
						Less than				2-3				4-5				More than
Contractual obligations		Total				1 year				years				years				5 years
Long-term debt		$	50.0			$	—			$	—			$	50.0			$	—
Operating leases			7.4				2.6				3.1				1.6				0.1
Total cash contractual obligations(1)		$	57.4			$	2.6			$	3.1			$	51.6			$	0.1

(1)	Total contractual obligations exclude future annual variable cash contributions to the VEBAs, which cannot be determined at this time. See “—Off Balance Sheet and Other Arrangements” below for a summary of possible annual variable cash contribution amounts at various levels of earnings and cash expenditures.

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•	A commitment to provide one or more defined contribution 401(k) plans as a replacement for three of four defined benefit pension plans for hourly bargaining unit employees at four of our production facilities. The defined benefit plans at these four production facilities were terminated during the fourth quarter of 2006, effective as of October 10, 2006, pursuant to a court ruling received in July 2006. These replacement plans provide for an annual contribution ranging from $800 to $2,400 per bargaining unit employee, depending on the employee’s age. We also agreed to make monthly contributions of one dollar per hour worked by each bargaining unit employee to the appropriate multi-employer pension plans sponsored by the USW and certain other unions at each of these four facilities.
•	A defined contribution 401(k) savings plan for hourly bargaining unit employees at all of our other production facilities. Pursuant to the terms of the defined contribution plan, we will be required to make annual contributions to the Steelworkers Pension Trust on the basis of one dollar per USW employee hour worked at two facilities. We will also be required to make contributions to the defined contribution savings plan for active USW employees at these facilities that will range from $800 to $2,400 per employee per year, depending on the employee’s age.
•	A defined benefit pension plan for our salaried employees at our facility in London, Ontario with annual contributions based on each salaried employee’s age and years of service.
•	A defined contribution savings plan for salaried and non-bargaining unit hourly employees providing for a match of certain contributions made by employees plus a contribution of between 2% and 10% of their salary depending on their age and years of service.
•	A defined benefit pension plan for one inactive operation with three remaining former employees covered by that plan.
•	An annual variable cash contribution to the VEBAs. The amount to be contributed to the VEBAs will be 10% of the first $20.0 million of annual cash flow (defined generally as earnings before interest expense, provision for income taxes and depreciation and amortization (“EBITDA”) less cash payments for, among other things, interest, income taxes and capital expenditures (“Cash Payments”)) plus 20% of annual cash flow, as defined, in excess of $20.0 million. Such annual payments will not exceed $20.0 million and will also be limited (with no carryover to future years) to the extent that the payments would cause our liquidity to be less than $50.0 million. Such amounts will be determined on an annual basis and payable no later than March 31 of the following year. However, we have the ability to offset amounts that would otherwise be due to the VEBAs with approximately $12.7 million of excess contributions made to the VEBAs prior to the effective date of our plan of reorganization.

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The following table shows (in millions of dollars) the estimated amount of variable VEBA payments that would occur at differing levels of EBITDA and Cash Payments in respect of, among other items, interest, income taxes and capital expenditures. The table below does not consider the liquidity limitation, the $12.7 million of advances available to us to offset VEBA obligations as they become due and certain other factors that could effect the amount of variable VEBA payments due and, therefore, should be considered only for illustrative purposes.

		Cash Payments
EBITDA		$25.0				$50.0				$75.0				$100.0
$ 20.0		$	—			$	—			$	—			$	—
40.0			1.5				—				—				—
60.0			5.0				1.0				—				—
80.0			9.0				4.0				0.5				—
100.0			13.0				8.0				3.0				—
120.0			17.0				12.0				7.0				2.0
140.0			20.0				16.0				11.0				6.0
160.0			20.0				20.0				15.0				10.0
180.0			20.0				20.0				19.0				14.0
200.0			20.0				20.0				20.0				18.0

•	A short-term incentive plan for management, payable in cash, which is based primarily on earnings, adjusted for certain safety and performance factors. Most of our locations have similar programs for both hourly and salaried employees.
•	A stock based long-term incentive plan for key managers. As more fully discussed in Note 7 to our interim consolidated financial statements an initial, emergence-related award was made under this program. Additional awards are expected to be made in future years.

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•	the timing of when any such conditional asset retirement obligation may be incurred;
•	the ability to accurately identify all materials that may require special handling or treatment;
•	the ability to reasonably estimate the total incremental special handling and other costs;
•	the ability to assess the relative probability of different scenarios which could give rise to a conditional asset retirement obligation; and
•	other factors outside our control including changes in regulations, costs and interest rates.

•	actual results for the balance of 2006 vary from that in the nine months ended September 30, 2006 and our forecasts due to one or more of the factors cited above or elsewhere in this prospectus;
•	income is distributed differently than expected among tax jurisdictions;
•	one or more material events or transactions occur which were not contemplated; or
•	certain expected deductions, credits or carryforwards are not available;

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•	the timing of when any such conditional asset retirement obligation may be incurred;
•	the ability to accurately identify all materials that may require special handling or treatment;
•	the ability to reasonably estimate the total incremental special handling and other costs;
•	the ability to assess the relative probability of different scenarios which could give rise to a conditional asset retirement obligation; and
•	other factors outside our control including changes in regulations, costs and interest rates.

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•	Additional pre-filing date claims were identified through the proof of claim reconciliation process and arose in connection with our actions in the chapter 11 bankruptcy proceedings. For example, while we considered rejection of the Bonneville Power Administration contract to be in our best long-term interests, the rejection resulted in an approximate $75.0 million claim by the Bonneville Power Administration. In the quarter ended June 30, 2006, an agreement with the Bonneville Power Administration was approved by the bankruptcy court under which the claim was settled for a pre-petition claim of $6.1 million.
•	The amount of pre-filing date claims ultimately allowed by the bankruptcy court related to disputed claims was materially different from the amount reflected in our consolidated financial statements.
•	Changes in our business plan precipitated by the chapter 11 bankruptcy proceedings resulted in significant charges associated with the disposition of assets.

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•	Claims in Respect of Retiree Medical Obligations. Pursuant to settlements reached with representatives of hourly and salaried retirees in early 2004:

	-	an aggregate of 11,439,900 shares of our common stock were delivered to the Union VEBA Trust and entities that prior to July 6, 2006 acquired from the Union VEBA Trust rights to receive a portion of such shares; and
	-	an aggregate of 1,940,100 shares of our common stock were delivered to the Salaried Retiree VEBA Trust and entities that prior to July 6, 2006 acquired from the Salaried Retiree VEBA Trust rights to receive a portion of such shares.

•	Priority Claims and Secured Claims. All pre-petition priority claims, pre-petition priority tax claims and pre-petition secured claims were paid in full in cash.

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•	Unsecured Claims. With respect to pre-petition unsecured claims (other than the personal injury claims specified below):

	-	all pre-petition unsecured claims of the PBGC against our Canadian subsidiaries were satisfied by the delivery of 2,160,000 shares of common stock and $2.5 million in cash; and
	-	all pre-petition general unsecured claims against us, other than our Canadian subsidiaries, including claims of the PBGC and holders of our public debt, were satisfied by the issuance of 4,460,000 shares of our common stock to a third-party disbursing agent, with such shares to be delivered to the holders of such claims in accordance with the terms of our plan of reorganization (to the extent that such claims do not constitute convenience claims that have been or will be satisfied with cash payments). Of such 4,460,000 shares of common stock, approximately 250,000 shares were being held by the third-party disbursing agent as of December 31, 2006 as a reserve pending resolution of disputed claims. To the extent a holder of a disputed claim is not entitled to shares reserved in respect of such claim, such shares will be distributed to holders of allowed claims.

•

Personal Injury Claims. Certain trusts, the PI Trusts, were formed to receive distributions from us, assume responsibility from us for present and future asbestos personal injury claims, present and future silica personal injury claims, present and future coal tar pitch personal injury claims and present but not future noise-induced hearing personal injury claims, and to make payments in respect of such personal injury claims. We contributed to the PI Trusts:

	-	the rights with respect to proceeds associated with personal injury-related insurance recoveries reflected on our consolidated financial statements at June 30, 2006 as a receivable having a value of $963.3 million;
	-	$13.0 million in cash (less approximately $0.3 million advanced prior to July 6, 2006);
	-	the stock of a subsidiary whose primary asset was approximately 145 acres of real estate located in Louisiana and the rights as lessor under a lease agreement for such real property that produces modest rental income; and
	-	75% of a pre-petition general unsecured claim against one of our subsidiaries in the amount of $1,106.0 million, entitling the PI Trusts to a share of the 4,460,000 shares of common stock distributed to unsecured claimholders.

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•	Products sold for aerospace and high strength applications represented 29% of our 2005 fabricated products shipments. We offer various aluminum fabricated products to service aerospace and high strength customers, including heat treat plate and sheet products, as well as cold finish bars and seamless drawn tubes. Heat treated products are distinguished from common alloy products by higher strength, fracture toughness and other desired product attributes.
•	Products sold for general engineering applications represented 44% of our 2005 fabricated products shipments. This market consists primarily of transportation and industrial end customers who purchase a variety of extruded, drawn and forged fabricated products through large North American distributors.
•	Products sold for custom automotive and industrial applications represented 27% of 2005 fabricated products shipments. These products include custom extruded, drawn and forged aluminum products for a variety of applications. While we are capable of producing forged products for most end-use applications, we concentrate our efforts on meeting demand for forged products, other than wheels, in the automotive industry.

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Global Commercial Aircraft Build > 50 Seats		U.S. Index of Industrial Production Seasonally Adjusted

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•	Plate (0.025 inch or more)— Plate is used in heavy duty aerospace, machinery and transportation applications. Plate applications include structural sections for rail cars and large ships, structural components and skins of jumbo jets and spacecraft fuel tanks as well as armor protection for military vehicles.
•	Sheet (0.006 to 0.0249 inch)— Sheet is the most widely used form of aluminum. Sheet applications include packaging (beverage cans and closures), home appliances and cookware, automobile panels, aircraft skins and building products such as siding, roofing and awnings.
•	Foil (less than 0.006 inch)— Foil is the thinnest of the flat-rolled aluminum products. Foil applications include flexible packaging, household foil and fin stock for air conditioning, industrial and automotive applications.

•	Rods and Bars— Rods and bars are used in aerospace and general machinery applications. Examples include rivets, screws, bolts and machinery parts.
•	Pipes and Tubes— Pipes and tubes are used in aerospace, automotive, building and construction and consumer durable applications. Examples include automotive drive shafts, fluid circulation and control systems for air conditioning, hydraulics and irrigation, and light poles.
•	Profiles (or “shapes”)— Profiles are used in automotive, consumer durable and building and construction applications. Examples include truck trailers, automobile bumpers, heat distribution systems (heat sinks), doors, windows, commercial building facades, ladders and scaffolds.

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•	Leading market positions in value-added niche markets for fabricated products. We have repositioned our business to concentrate on products in which we believe we have strong

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	production capability, well-developed technical expertise and high product quality. We believe that we hold a leading market share position in niche markets that represented approximately 85% of our 2005 net sales from fabricated aluminum products. Our leading market position extends throughout our broad product offering, including plate, sheet, seamless extruded and drawn tube, rod, bar, extrusions and forgings for use in a variety of value-added aerospace, general engineering and custom automotive and industrial applications.
•	Well-positioned growth platform. We have substantial organic growth opportunities in the production of aluminum plate, extrusions and forgings. We are in the midst of a $105 million expansion of our Trentwood facility that will allow us to significantly increase production capacity and enable us to produce thicker gauge aluminum plate. We also have the ability to add presses and other manufacturing equipment at several of our current facilities in order to increase extrusion and forging capacity. Additionally, we believe our platform and financial strength provide us with flexibility to create additional stockholder value through selective acquisitions.
•	Supplier of choice. We pursue “best-in-class” customer satisfaction through the consistent, on-time delivery of high quality products on short lead times. We offer our customers a portfolio of both highly engineered and industry standard products that is unmatched in breadth and depth by most of our competitors. Our continuous improvement culture is grounded in our production system, the Kaiser Production System, which involves an integrated utilization of application and advanced process engineering and business improvement methodologies such as lean enterprise, total productive maintenance and six sigma. We believe that our broad product portfolio of highly engineered products and the Kaiser Production System, together with our established record of product innovation, will allow us to remain the supplier of choice for our customers and further enhance our competitive position.
•	Blue-chip customer base and diverse end markets. Our fabricated products customers include leading aerospace companies, automotive suppliers and metal distributors, such as A.M. Castle-Raytheon, Airbus Industrie, Boeing, Bombardier, Eclipse Aviation, Reliance Steel & Aluminum and Transtar-Lockheed Martin. We have long-term relationships with our top customers, many of which we have served for decades. Our customer base spans a variety of end markets, including aerospace and defense, automotive, consumer durables, machinery and equipment, and electrical.
•	Financial strength. We have little debt and significant liquidity as a result of our recent chapter 11 bankruptcy reorganization. We also have net operating loss carry-forwards and other significant tax attributes that may reduce our future cash payments of U.S. income tax. We previously disclosed our belief that these tax attributes could together offset in the range of $555 to $900 million of otherwise taxable income, and we currently anticipate that, upon completion of our 2006 income tax return analysis, the amount of our tax attributes as of December 31, 2006 will likely be in the upper half of that range.
•	Strong and experienced management. The members of our senior management team have, on average, 20 years of industry work experience, particularly within the areas of operations, technology, marketing and finance. Our management team has repositioned our fabricated products business and led us through our recent chapter 11 bankruptcy reorganization, creating a focused business with financial and competitive strength.

•	Pursue organic growth. We will continue to utilize our manufacturing platform to increase growth in areas where we are well-positioned such as aluminum plate, forgings and extrusions. For

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	instance, we anticipate that the expansion of our Trentwood facility will enable us to significantly increase our production capacity and enable us to produce thicker gauge aluminum plate, allowing us to capitalize on the significant growth in demand for high quality heat treat aluminum plate products in the market for Aero/ HS products. Further, our well-equipped extrusion and forging facilities provide a platform to expand production as we take advantage of opportunities and our strong customer relationships in the aerospace and industrial end markets.
•	Continue to differentiate our products and provide superior customer support. As part of our ongoing supplier of choice efforts, we will continue to strive to achieve “best-in-class” customer satisfaction. We will also continue to offer a broad portfolio of differentiated, superior-quality products with high engineering content, tailored to the needs of our customers. For instance, our unique T-Form® sheet provides aerospace customers with high formability as well as requisite strength characteristics, enabling these customers to substantially lower their production costs. Additionally, we believe our Kaiser Select® Rod established a new industry benchmark for quality and performance in automatic screw applications. By continually striving for “best-in-class” customer satisfaction and offering a broad portfolio of differentiated products, we believe we will be able to maintain our premium product pricing, increase our sales to current customers and gain new customers, thereby increasing our market share.
•	Continue to enhance our operating efficiencies. During the last five years, we have significantly reduced our costs by narrowing our product focus, strategically investing in our production facilities and implementing the Kaiser Production System. We will continue to implement additional measures to enhance our operating efficiency and productivity, which we believe will further decrease our production costs.
•	Maintain financial strength. We intend to employ debt judiciously in order to remain financially strong throughout the business cycle and to maintain our flexibility to capitalize on growth opportunities.
•	Enhance our product portfolio and customer base through selective acquisitions. We may seek to grow through acquisitions and strategic partnerships. We will selectively consider acquisition opportunities that we believe will complement our product portfolio and add long-term stockholder value.

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•	Spot price. Some of our customers pay a product price that incorporates the spot price of primary aluminum in effect at the time of shipment to a customer. This pricing mechanism typically allows us to pass commodity price risk to the customer.
•	Index-based price. Some of our customers pay a product price that incorporates an index-based price for primary aluminum such as Platt’s Midwest price for primary aluminum. This pricing mechanism also typically allows us to pass commodity price risk to the customer.
•	Fixed price. Some of our customers pay a fixed price. During 2003, 2004, 2005 and the nine months ended September 30, 2006, approximately 97.6 million pounds (or approximately 26%), 119.0 million pounds (or approximately 26%), 155.0 million pounds (or approximately 32%) and 153.0 million pounds (or approximately 38%), respectively, of our fabricated products were sold at a fixed price. We bear commodity price risk on fixed-price contracts, which we normally hedge though a combination of financial derivatives and production from Anglesey.

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Location		Manufacturing process		Products
Chandler, Arizona		Drawing		Aero/HS
Greenwood, South Carolina		Forging		Custom
Jackson, Tennessee		Extrusion and drawing		Aero/HS and general engineering
London, Ontario		Extrusion		Custom
Los Angeles, California		Extrusion		General engineering and custom
Newark, Ohio		Extrusion and rolling		Aero/HS and general engineering
Richland, Washington		Extrusion		Aero/HS and general engineering
Richmond, Virginia		Extrusion and drawing		General engineering and custom
Sherman, Texas		Extrusion		Custom
Spokane, Washington		Rolling		Aero/HS and general engineering
Tulsa, Oklahoma		Extrusion		General engineering

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Location		Union		Contract expiration date
Chandler, Arizona		Non-union		NA
Greenwood, South Carolina		Non-union		NA
Jackson, Tennessee		Non-union		NA
London, Ontario		USW Canada		February 2009
Los Angeles, California		Teamsters		May 2009
Newark, Ohio		USW		September 2010
Richland, Washington		Non-union		NA
Richmond, Virginia		USW/ IAM		November 2010
Sherman, Texas		IAM		December 2007
Spokane, Washington		USW		September 2010
Tulsa, Oklahoma		USW		November 2010

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Name		Age		Position(s)
Jack A. Hockema		60		President, Chief Executive Officer and Chairman of the Board; Director
Joseph P. Bellino		56		Executive Vice President and Chief Financial Officer
John Barneson		55		Senior Vice President and Chief Administrative Officer
John M. Donnan		45		Vice President, Secretary and General Counsel
Daniel D. Maddox		46		Vice President and Controller
Daniel J. Rinkenberger		47		Vice President and Treasurer
George Becker		78		Director
Carl B. Frankel		72		Director
Teresa A. Hopp		47		Director
William F. Murdy		64		Director
Alfred E. Osborne, Jr., Ph.D.		62		Director
Georganne C. Proctor		50		Director
Jack Quinn		55		Director
Thomas M. Van Leeuwen		50		Director
Brett E. Wilcox		53		Director

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Name
		Class
Alfred E. Osborne, Jr., Ph.D.			Class I
Jack Quinn			Class I
Thomas M. Van Leeuwen			Class I
George Becker			Class II
Jack A. Hockema			Class II
Georganne C. Proctor			Class II
Brett E. Wilcox			Class II
Carl B. Frankel			Class  III
Teresa A. Hopp			Class  III
William F. Murdy			Class  III

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•	the general independence criteria;
•	the qualifications to serve as a director as set forth in any applicable corporate governance guidelines adopted by the board of directors and policies adopted by our nominating and corporate governance committee establishing criteria to be utilized by it in assessing whether a director candidate has appropriate skills and experience; and
•	any other qualifications to serve as director imposed by applicable law.

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•	establishing hiring policies for employees or former employees of the independent auditors;
•	reviewing our systems of internal accounting controls;
•	discussing risk management policies;
•	approving related-party transactions;
•	establishing procedures for complaints regarding financial statements or accounting policies; and
•	performing other duties delegated to the audit committee by the board of directors from time to time.

•	must satisfy the general independence criteria;
•	may not, other than as a member of the board of directors or a committee thereof, accept any consulting, advisory or other compensatory fee from us or our subsidiaries (other than fixed amounts of compensation under a retirement plan for prior service, provided such compensation is not contingent on continued service);
•	may not be our affiliate;
•	must not have participated in the preparation of our financial statements at any time during the three years prior to July 6, 2006; and
•	must be able to read and understand fundamental financial statements.

•	administering plans adopted by the board of directors that contemplate administration by the compensation committee, including our 2006 Equity and Performance Incentive Plan;
•	overseeing regulatory compliance with respect to compensation matters;
•	reviewing director compensation; and
•	performing other duties delegated to the compensation committee by the board of directors from time to time.

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•	evaluating stockholder recommendations for director nominations;
•	assisting in succession planning;
•	considering possible conflicts of interest of members of the board of directors and management and making recommendations to prevent, minimize or eliminate such conflicts of interests;
•	making recommendations to the board of directors regarding the appropriate size of the board of directors; and
•	performing other duties delegated to the nominating and corporate governance committee by the board of directors from time to time.

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Name		Title
Jack A. Hockema		President and Chief Executive Officer (our principal executive officer)
Joseph P. Bellino		Executive Vice President and Chief Financial Officer (our principal financial officer)
John Barneson		Senior Vice President and Chief Administrative Officer
John M. Donnan		Vice President, Secretary and General Counsel
Daniel D. Maddox		Vice President and Controller (our principal accounting officer)
Kerry A. Shiba		Former Vice President and Chief Financial Officer (our former principal financial officer)

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•	Create alignment between senior management and stockholders by rewarding senior management for the achievement of strategic goals that successfully drive our operations and enhance stockholder value;
•	Attract, motivate and retain highly experienced executives vital to our short-term and long-term success, profitability and growth;
•	Differentiate senior management rewards based on actual performance; and
•	Provide targeted compensation levels consistent with the 50th percentile of our compensation peer group, which is discussed below, for base salary, the 50th percentile for annual monetary incentives at target-level performance and between the 50th and the 65th percentile for annualized economic equity grant value of long-term incentives.

•	Balance short-term and long-term goals (approximately 50% of the chief executive officer’s target total compensation is delivered through long-term incentives, while approximately 40% of the target total compensation for the other named executive officers is delivered through long-term incentives);
•	Deliver a mix of fixed and at-risk compensation (by design, approximately 70% of the chief executive officer’s target total compensation and approximately 60% of the target total compensation for the other named executive officers is variable, i.e., at-risk, annual and long-term incentive compensation) that is directly related to stockholder value and our overall performance;
•	Provide guidelines for a compensation program that is competitive with our compensation peer group; and
•	Use equity-based awards, stock ownership guidelines and annual incentives that are linked to stockholder value and achievement of individual, business unit and corporate performance.

•	The external challenges to our ability to attract and retain strong senior management;
•	Each individual’s contributions to our overall results;
•	Our operating and financial performance compared with the targeted goals; and
•	Our size and complexity compared with companies in our compensation peer group.

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•	a two-year retention plan (which we refer to as our Chapter 11 Retention Plan) that provided semi-annual retention payments to key employees through March 31, 2004, with a significant portion of those payments to certain senior employees, including Messrs. Hockema and Barneson, being withheld and paid, subject to certain conditions relating to continued employment, in two installments — the first on the date of emergence and the second one year later, all as more fully described below (see “— Chapter 11 Retention Plan” and footnote 8 under “— Summary compensation table for 2006”);
•	a long-term incentive plan (which we refer to as our Chapter 11 Long-Term Incentive Plan) designed to provide incentives for key employees to achieve cost reductions in excess of $80 million annually, with all awards earned being withheld and paid, subject to certain conditions relating to continued employment, in two installments — the first on the date of emergence and the second one year later, all as more fully described below (see “— Long-term incentives” and footnote 2 under “— Summary compensation table for 2006”);
•	a severance plan (which we refer to as our Severance Plan) and related agreements designed to provide key employees with job security in an uncertain environment, as more fully described below

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	(see “— Employment contracts, termination of employment arrangements and change in control agreements” and “— Employment-related agreements and certain employee benefit plans — Severance Plan”);
•	change-in-control severance agreements (which we refer to as Change in Control Agreements) intended to retain key employees through any potential merger or acquisition transaction, as more fully described below (see “— Employment contracts, termination of employment arrangements and change in control agreements” and “— Employment-related agreements and certain employee benefit plans — Change in control severance agreements”); and
•	the continuance for key employees of our then-existing nonqualified, unfunded supplemental executive retirement plan (which we refer to as our Old Restoration Plan) intended to restore benefits that would be payable to participants in the Kaiser Aluminum Salaried Employees Retirement Plan, a defined benefit pension plan previously maintained by us for our salaried employees (which we refer to as our Old Pension Plan), but for legal limitations on benefit accruals and payments thereunder, as more fully described below (see “— Retirement benefits” and “— Nonqualified deferred compensation for 2006”).

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		Amount of base
		salary increase
Name		for 2006				2006 Base salary
Jack A. Hockema			—			$	730,000
Joseph P. Bellino			—			$	350,000
John Barneson		$	5,000			$	280,000
John M. Donnan			—			$	260,000
Daniel D. Maddox		$	25,000			$	225,000
Kerry A. Shiba			—			$	270,000

		Below
Name		threshold				Threshold				Target				Maximum
Jack A. Hockema			0%				34.25%				68.50%				205.50%
Joseph P. Bellino			0%				25.00%				50.00%				150.00%
John Barneson			0%				22.50%				45.00%				135.00%
John M. Donnan			0%				22.50%				45.00%				135.00%
Daniel D. Maddox			0%				16.67%				33.33%				100.00%

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						Percentage of
		Number of shares				outstanding
Name		restricted stock				shares
Jack A. Hockema			185,000				.90%
Joseph P. Bellino			15,000				.07%
John Barneson			48,000				.23%
John M. Donnan			45,000				.22%
Daniel D. Maddox			11,334				.06%

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		Balance transferred
		to the New
Name		Restoration Plan
Jack A. Hockema		$964,718
John Barneson		$887,366
John M. Donnan		$54,851
Daniel D. Maddox		$41,416

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														Change in
														pension
														value and
														nonqualified
										Non-equity				deferred
Name and principal						Stock				incentive plan				compensation				All other
position		Year		Salary		awards(1)				compensation(2)(3)				earnings(4)				compensation				Total
Jack A. Hockema		2006		$730,000		$	1,301,167			$	1,649,440	(5)		$	8,403			$	539,556	(6)(7)(8)(9)		$	4,228,566
President, Chief Executive Officer and Chairman of the Board
Joseph P. Bellino		2006		$220,018		$	105,500				—	(5)			—			$	39,119	(6)(7)(10)		$	364,637
Executive Vice President and Chief Financial Officer
John Barneson		2006		$278,750		$	337,600			$	346,938	(5)		$	5,020			$	191,942	(6)(7)(8)(11)		$	1,160,250
Senior Vice President and Chief Administrative Officer
John M. Donnan		2006		$260,000		$	316,500			$	104,554	(5)		$	(603	)		$	41,897	(6)(7)(12)		$	722,348
Vice President, Secretary and General Counsel
Daniel D. Maddox		2006		$222,917		$	318,863			$	114,043	(5)		$	(256	)		$	36,971	(6)(7)(13)		$	692,538
Vice President and Controller
Kerry A. Shiba		2006		$17,386			—			$	253,511	(5)		$	884			$	433,646	(6)(14)		$	705,427
Vice President and Chief Financial Officer

(1)

Reflects the value of restricted stock awards granted to our named executive officers under our Equity Incentive Plan on July 6, 2006 in connection with our emergence from chapter 11 bankruptcy based on the compensation cost of the award with respect to our 2006 fiscal year computed in accordance with Financial Accounting Standards Board Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment, which we refer to as SFAS No. 123-R, but excluding any impact of assumed forfeiture rates. The number of shares of restricted stock received by our named executive officers pursuant to such awards was as follows: Mr. Hockema, 185,000; Mr. Bellino, 15,000; Mr. Barneson, 48,000; Mr. Donnan, 45,000; and Mr. Maddox, 11,334. The table reflects the expense recognized for each named

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	executive officer (other than Messrs. Maddox and Shiba) for the six-month portion of the three-year vesting period for the restricted stock extending from our emergence date through December 31, 2006, computed in accordance with SFAS No. 123-R, but excluding any impact of assumed forfeiture rates, based on (a) a per share value at emergence of $42.20 and (b) the total number of shares of restricted stock received by the named executive officer. The table reflects the expense recognized for Mr. Maddox computed in accordance with SFAS No. 123-R, but excluding any impact of assumed forfeiture rates, based on (a) a per share value at emergence of $42.20, (b) the total number of shares of restricted stock received by him, (c) the assumptions that his employment will terminate and that his shares of restricted stock will vest on March 31, 2007, and (d) the six- month portion of the assumed nine-month vesting period for his restricted stock extending from our emergence date through December 31, 2006. Mr. Shiba, who resigned effective January 23, 2006, did not receive a restricted stock award.
(2)	Reflects payments under our Chapter 11 Long-Term Incentive Plan, pursuant to which key management employees accrued cash awards based on our attainment of sustained cost reductions above $80 million annually for the four and one-half year period from 2002 through our emergence from chapter 11 bankruptcy on July 6, 2006.
(3)	Does not reflect earnings under our 2006 Short-Term Incentive Plan, pursuant to which key management employees earned cash awards based on the financial and safety performance of our fabricated products business unit, the performance of the particular business unit to which the employee was assigned and individual performance objectives, because earnings under our 2006 Short-Term Incentive Plan are not presently calculable. Amounts earned by Messrs. Hockema, Bellino, Barneson, Donnan and Maddox under our 2006 Short-Term Incentive Plan are expected to be determined in March 2007, at which time they will be disclosed by us in a Current Report on Form 8-K filed with the SEC. As indicated above, although 2006 results are not yet available, based on our results through the third quarter, we currently estimate that the 2006 award multiple will be between 1.5 and 2.5 of the target percentage or award and, accordingly, that individual awards will be between 1.5 and 2.5 times an individual’s incentive target percentage or award, before taking into account any adjustments for individual performance and applicable modifiers. Mr. Shiba, who resigned effective January 23, 2006, did not participate in our 2006 Short-Term Incentive Plan.
(4)	Reflects the aggregate change in actuarial present value of the named executive officer’s accumulated benefit under our Old Pension Plan during 2006 calculated by (a) assuming mortality according to the RP-2000 Combined Health mortality table published by the Society of Actuaries and (b) applying a discount rate of 5.50% per annum to determine the actuarial present value of the accumulated benefit at December 31, 2005 and a discount rate of 5.75% per annum to determine the actuarial present value of the accumulated benefit at December 31, 2006. Effective December 17, 2003, the PBGC terminated and effectively assumed responsibility for making benefit payments in respect of our Old Pension Plan, whereupon all benefit accruals under the Old Pension Plan ceased and benefits available thereunder to certain salaried employees, including Messrs. Hockema and Barneson, were significantly reduced due to the limitations on benefits payable by the PBGC. Above-market or preferential earnings are not available under our New Restoration Plan, which is our only plan or arrangement pursuant to which compensation may be deferred on a basis that is not tax-qualified, or any of our other benefit plans.
(5)	Reflects amounts paid under our Chapter 11 Long-Term Incentive Plan in 2006. For each of Messrs. Hockema, Barneson, Donnan and Maddox, these amounts represent approximately one-half of the total amounts accrued under our Chapter 11 Long-Term Incentive Plan during the four and one-half year period from 2002 through our emergence from chapter 11 bankruptcy on July 6, 2006; for Mr. Shiba, the amount represents the total amount accrued. The total amounts accrued under our Chapter 11 Long-Term Incentive Plan during the four and one-half year period for Messrs. Hockema, Barneson, Donnan and Maddox were as follows: Mr. Hockema, $3,298,880; Mr. Barneson, $693,876; Mr. Donnan, $208,575; and Mr. Maddox, $227,228.

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	Individual amounts accrued by year for Messrs. Hockema, Barneson, Donnan and Maddox were as follows: Mr. Hockema, $2,324,557 in 2002 and 2003, $918,818 in 2004, ($240,819) in 2005 and $296,324 in 2006; Mr. Barneson, $466,534 in 2002 and 2003, $214,391 in 2004, ($56,191) in 2005 and $69,142 in 2006; Mr. Donnan, $146,045 in 2002 and 2003, $55,129 in 2004, ($32,109) in 2005 and $39,510 in 2006; and Mr. Maddox, $162,274 in 2002 and 2003, $61,255 in 2004, ($16,055) in 2005 and $19,755 in 2006. Annual awards during this period were approximately 81% of target in 2002 and 2003; 61% of target in 2004; (16%) of target in 2005; and 40% of target in 2006, with an average award of approximately 55% of target over the four and one-half year period. For each of Messrs. Hockema, Barneson, Donnan and Maddox, the 2006 payments under our Chapter 11 Long-Term Incentive Plan were made in August 2006 following our emergence and the remaining portion of the total amount (subject to adjustment in accordance with the terms of the Chapter 11 Long-Term Incentive Plan) will be paid on July 6, 2007 unless he is terminated for cause or voluntarily terminates his employment prior to that date. For Mr. Shiba, pursuant to the terms of a release entered into between him and us in connection with his resignation, the total was paid in early 2006. Mr. Bellino, who joined us in May 2006, did not participate in our Chapter 11 Long-Term Incentive Plan.
(6)	Includes contributions made by us under our Savings Plan, as follows: Mr. Hockema, $22,883; Mr. Barneson, $24,225; Mr. Donnan, $21,133; and Mr. Maddox, $20,240. We did not make contributions under our Savings Plan to Mr. Shiba, who resigned effective January 23, 2006, or Mr. Bellino, who joined us in May 2006.
(7)	Includes contributions made by us under our New Restoration Plan which is intended to restore the benefit of contributions that we would have otherwise paid to participants under our Savings Plan but for limitations imposed by the Internal Revenue Code, as follows: Mr. Hockema, $105,037; Mr. Barneson, $27,873; Mr. Donnan, $9,809; and Mr. Maddox, $5,579. Mr. Shiba, who resigned effective January 23, 2006, and Mr. Bellino, who joined us in May 2006, did not participate in our New Restoration Plan.
(8)	Includes amounts paid to Messrs. Hockema and Barneson under our Chapter 11 Retention Plan in 2006 as follows: Mr. Hockema, $365,000; and Mr. Barneson, $125,000. For each of Messrs. Hockema and Barneson, these amounts represent approximately one-half of the total retention payments withheld from Messrs. Hockema and Barneson under the Chapter 11 Retention Plan. The total amounts withheld from Messrs. Hockema and Barneson were as follows: Mr. Hockema, $730,000; and Mr. Barneson, $250,000. The 2006 payments under our Chapter 11 Retention Plan were made in August 2006 following our emergence from chapter 11 bankruptcy and the remaining portion of the total amount withheld from each of Messrs. Hockema and Barneson will be paid on July 6, 2007 unless he is terminated for cause or voluntarily terminates his employment prior to that date.
(9)	Includes the cost to us of perquisites and other personal benefits for Mr. Hockema as follows: club membership dues, $6,875; legal fees and expenses incurred by Mr. Hockema in connection with the negotiation and consummation of his employment agreement with us, $25,191; and vehicle allowance, $14,570.

(10)	Includes the cost to us of perquisites and other personal benefits for Mr. Bellino as follows: club membership dues, $3,040; housing and other expenses associated with his relocation to California, $27,840; and vehicle allowance, $8,239.
(11)	Includes the cost to us of perquisites and other personal benefits for Mr. Barneson as follows: club membership dues, $4,385; and vehicle allowance, $10,459.
(12)	Includes the cost to us of perquisites and other personal benefits for Mr. Donnan as follows: vehicle allowance, $10,955.
(13)	Includes the cost to us of perquisites and other benefits for Mr. Maddox as follows: vehicle allowance, $11,152.
(14)	Includes $431,777 paid or accrued to Mr. Shiba pursuant to the release entered into between him and us in connection with his resignation (exclusive of amounts earned by him under our Chapter 11 Long-Term Incentive Plan (see Note 4 above) and amounts referred to in the next

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	sentence). Also includes the cost to us of perquisites and other personal benefits for Mr. Shiba as follows: club membership dues, $1,210; and vehicle allowance, $659.

						Estimated future payouts under												All other stock
						non-equity incentive plan awards(1)												awards: number				Grant date fair
																		of shares of				value of stock
						Threshold				Target				Maximum				stock or units(2)				awards(3)
Name		Grant date				($)				($)				($)				(#)				($)
Jack A. Hockema			—			$	250,025			$	500,050			$	1,500,150				—
			7/6/06				—				—				—				185,000			$	7,807,000
Joseph P. Bellino			—			$	87,500			$	175,000			$	525,000				—
			7/6/06				—				—				—				15,000			$	633,000
John Barneson			—			$	63,000			$	126,000			$	378,000				—
			7/6/06				—				—				—				48,000			$	2,025,600
John M. Donnan			—			$	58,500			$	117,000			$	351,000				—
			7/6/06				—				—				—				45,000			$	1,899,000
Daniel D. Maddox			—			$	37,500			$	75,000			$	225,000				—
			7/6/06				—				—				—				11,334			$	478,295
Kerry A. Shiba			—				—				—				—				—				—

(1)	Reflects the threshold, target and maximum award amounts under our 2006 Short-Term Incentive Plan for our named executive officers. No awards are available below the threshold performance level. Mr. Shiba, who resigned effective January 23, 2006, did not participate in our 2006 Short-Term Incentive Plan. Under our 2006 Short-Term Incentive Plan, participants may receive a cash incentive award between one-half and three times the participant’s target award amount. As indicated above, although 2006 results are not yet available, based on our results through the third quarter, we currently estimate that the 2006 award multiple will be between 1.5 and 2.5 of the target percentage or award and, accordingly, that individual awards will be between 1.5 and 2.5 times an individual’s incentive target percentage or award, before taking into account any adjustments for individual performance and applicable modifiers.
(2)	Reflects the number of shares of restricted stock received by our named executive officers pursuant to awards granted under our Equity Incentive Plan on July 6, 2006 in connection with our emergence from chapter 11 bankruptcy. The restrictions on all such shares will lapse on July 6, 2009 or earlier if the named executive officer’s employment terminates as a result of death or disability, the named executive officer’s employment is terminated by us without cause, the named executive officer’s employment is voluntarily terminated by him for good reason or if there is a change in control or, in the case of Mr. Maddox, his employment is terminated (other than by us for cause) upon the conclusion of his employment agreement. Mr. Shiba, who resigned effective January 23, 2006, did not receive a restricted stock award.

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(3)	The grant date fair value of the restricted stock awards reflected in this table is computed in accordance with SFAS No. 123-R, but excluding any impact of assumed forfeiture rates, based on (a) a per share value at our emergence from chapter 11 bankruptcy of $42.20 and (b) the total number of shares of restricted stock awarded.

•	base salary earned through the date of such termination;
•	except in the case of a termination by us for cause or by him other than for good reason, earned but unpaid incentive awards;
•	accrued but unpaid vacation;
•	benefits under our employment benefit plans to the extent vested and not forfeited on the date of such termination; and
•	benefit continuation and conversion rights to the extent provided under our employment benefit plans.

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•	base salary earned through the date of such termination;
•	except in the case of a termination by us for cause or by him other than for good reason, earned but unpaid incentive awards;
•	accrued but unpaid vacation;
•	benefits under our employment benefit plans to the extent vested and not forfeited on the date of such termination; and
•	benefit continuation and conversion rights to the extent provided under our employment benefit plans.

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•	the participant receives severance compensation or welfare benefit continuation pursuant to a Change in Control Agreement (described below);
•	the participant’s employment is terminated other than by us without cause or by the participant for good reason; or
•	the participant declines to sign, or subsequently revokes, a designated form of release.

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•	the participant receives severance compensation or welfare benefit continuation pursuant to the Severance Plan or any other prior agreement;
•	the participant’s employment is terminated other than by us without cause or by the participant for good reason; or
•	the participant declines to sign, or subsequently revokes, a designated form of release.

•	three times (for Mr. Barneson) or two times (for Messrs. Donnan and Maddox) the sum of his base pay and most recent short-term incentive target;
•	a pro-rated portion of his short-term incentive target for the year of termination; and

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•	a pro-rated portion of his long-term incentive target in effect for the year of his termination, provided that such target was achieved.

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•	the fabricated products business unit’s EBITDA;
•	the fabricated products business unit’s safety performance as measured by total case incident rate;
•	performance of the particular business to which a participant is assigned; and
•	individual performance objectives.

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•	For our employees who were employed with us on or before January 1, 2004, we contribute in a range from 2% to 10% of the employee’s compensation, based upon the sum of the employee’s age and years of continuous service as of January 1, 2004; and
•	For our employees who were first employed with us after January 1, 2004, we contribute 2% of the employee’s compensation.

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		Stock Awards
		Number of shares or units of				Market value of shares or units of
		stock that have not vested(1)				stock that have not vested(2)
Name		(#)				($)
Jack A. Hockema			185,000			$	10,356,300
Joseph P. Bellino			15,000			$	839,700
John Barneson			48,000			$	2,687,040
John M. Donnan			45,000			$	2,519,100
Daniel D. Maddox			11,334			$	634,477
Kerry A. Shiba			—				—

(1)	Reflects the number of shares of restricted stock received by our named executive officers pursuant to awards granted under our Equity Incentive Plan on July 6, 2006 in connection with our emergence from chapter 11 bankruptcy. The restrictions on all such shares will lapse on July 6, 2009 or earlier if the named executive officer’s employment terminates as a result of death or disability (or, in the case of Messrs. Hockema and Bellino, retirement), the named executive officer’s employment is terminated by us without cause, the named executive officer’s employment is voluntarily terminated by him for good reason or if there is a change in control or, in the case of Mr. Maddox, his employment is terminated (other than by us for cause) upon the conclusion of his employment agreement. Mr. Shiba, who resigned effective January 23, 2006, did not receive a restricted stock award.
(2)	Reflects the aggregate market value of the shares of restricted stock determined based on a per share price of $55.98, the reported closing price for our common stock on the Nasdaq Global Market on December 29, 2006, which was the last trading day of 2006.

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										Present value of
						Number of years				accumulated
						credited service				benefit(1)
Name		Plan name				(#)				($)
Jack A. Hockema			Kaiser Aluminum Salaried
			Employees Retirement Plan				11.92			$	293,262
John Barneson			Kaiser Aluminum Salaried
			Employees Retirement Plan				28.83			$	269,372
John M. Donnan			Kaiser Aluminum Salaried
			Employees Retirement Plan				10.25			$	129,390
Daniel D. Maddox			Kaiser Aluminum Salaried
			Employees Retirement Plan				7.58			$	94,867
Kerry A. Shiba			Kaiser Aluminum Salaried
			Employees Retirement Plan				5.58			$	91,016

(1)	Reflects the actuarial present value of the named executive officer’s accumulated benefit under our Old Pension Plan at December 31, 2006 determined (a) assuming mortality according to the RP-2000 Combined Health mortality table published by the Society of Actuaries and (b) applying a discount rate of 5.75% per annum.

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		Registrant				Aggregate				Aggregate
		contributions				earnings in				balance at
Name		in last FY(1)				last FY(2)				last FYE(3)
Jack A. Hockema		$	105,037			$	26,051			$	1,095,806
Joseph P. Bellino			—				—				—
John Barneson		$	27,873			$	19,102			$	934,341
John M. Donnan		$	9,809			$	7,359			$	72,018
Daniel D. Maddox		$	5,579			$	1,144			$	48,140
Kerry A. Shiba			—				—				—

(1)	In each case, 100% of such amount is included in the “All Other Compensation” column of the summary compensation table above. See “—Summary Compensation table for 2006.”
(2)	Amounts included in this column do not include above-market or preferential earnings (of which there were none) and, accordingly, such amount is not included in the “Change in Pension Value and Nonqualified Deferred Compensation Earnings” column of the summary compensation table above. See “—Summary Compensation table for 2006.”
(3)	Includes amounts accrued under the Old Restoration Plan and transferred to accounts under the New Restoration Plan upon its adoption in connection with our emergence from chapter 11 bankruptcy, as follows: Mr. Hockema, $964,718; Mr. Barneson, $887,366; Mr. Donnan, $54,851; and Mr. Maddox, $41,416. Mr. Shiba, who resigned effective January 23, 2006, did not participate in the New Restoration Plan and, accordingly, the amount of benefits accrued to him under the Old Restoration Plan was not transferred to the New Restoration Plan. Mr. Bellino, who joined us in May 2006, did not participate in the New Restoration Plan in 2006.

•	If our matching contributions to a participant under the Savings Plan are limited in any year, we will make an annual contribution to that participant’s account under the New Restoration Plan equal to the difference between:

	-	the matching contributions that we could have made to that participant’s account under the Savings Plan if the Internal Revenue Code did not impose any limitations; and
	-	the maximum contribution we could in fact make to that participant’s account under the Savings Plan in light of the limitations imposed by the Internal Revenue Code.

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	A participant is required to be making elective contributions under our Savings Plan on the first day of the year in order to receive a matching contribution from us under our New Restoration Plan for that year. However, matching contributions under the New Restoration Plan are calculated as though the participant elected to make the maximum permissible elective contributions under the Savings Plan sufficient to receive the maximum matching contribution from us under the Savings Plan, without regard for the participant’s actual elective contributions. Participants are immediately vested 100% in our matching contributions to the New Restoration Plan.
•	Annual fixed-rate contributions to the participant’s account under the New Restoration Plan are made in an amount equal to between 2% and 10% of the participant’s excess compensation, as defined in Section 401(a)(17) of the Internal Revenue Code. The actual fixed-rate contribution percentage is determined based upon the sum of the participant’s age and years of continuous service as of January 1, 2004. If a participant is first employed with us after January 1, 2004, the fixed-rate contribution percentage is 2%. A participant is required to be employed on the last day of the year in order to receive the fixed-rate contribution. Further, to the extent that fixed-rate contributions to a participant under our Savings Plan on compensation that is not excess compensation, as defined in Internal Revenue Code Section 401(a)(17), cannot be made under the Savings Plan due to Internal Revenue Code limitations, such fixed-rate contributions will be made to such participant’s account under our New Restoration Plan. Participants are vested 100% in our fixed-rate contributions to our New Restoration Plan after five years of service or upon retirement, death, disability or a change of control.

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•	voluntary termination by the named executive officer;
•	termination by us for cause;
•	termination by us without cause or by the named executive officer with good reason;
•	termination by us without cause or by the named executive officer with good reason following a change in control;
•	termination at normal retirement;
•	termination as a result of disability; or
•	termination as a result of death.

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JACK A. HOCKEMA
			Circumstances of Termination
															Termination
															by us without
											Termination				cause or by
											by us without				the named
											cause or by				executive
			Voluntary								the named				officer with
			termination								executive				good reason
			by named				Termination				officer with				following a				Normal
Payments and benefits			executive officer				by us for cause				good reason				change in control				retirement				Disability				Death
Payment of earned but unpaid:
	Base salary(1)			—				—				—				—				—				—				—
	Long-term incentive(2)			—				—			$	1,649,440			$	1,649,440			$	1,649,440			$	1,649,440			$	1,649,440
	Short-term incentive(3)			—				—			$	497,310			$	497,310			$	497,310			$	497,310			$	497,310
	Retention payment(4)			—				—			$	365,000			$	365,000			$	365,000			$	365,000			$	365,000
	Vacation(5)		$	56,154			$	56,154			$	56,154			$	56,154			$	56,154			$	56,154			$	56,154
Other benefits:
	Lump-sum payment			—				—			$	2,460,100	(6)		$	3,690,150	(7)			—				—				—
	Healthcare benefits			—				—			$	29,880	(8)		$	45,474	(8)			—				—				—
	Disability benefits			—				—			$	13,450	(9)		$	18,212	(9)			—			$	710,856	(10)			—
	Life insurance			—				—				—	(11)			—	(11)			—				—				—	(12)
	Perquisites and other personal benefits			—				—				—				—				—				—				—
	Tax gross-up(13)			—				—				—			$	4,393,426				—				—				—
Acceleration of stock awards:
	Market value of stock vesting on termination(14)			—				—			$	10,356,300			$	10,356,300			$	10,356,300			$	10,356,300			$	10,356,300
Distribution of New Restoration Plan balance:
	Amount of distribution (15)		$	1,095,806			$	—			$	1,095,806			$	1,095,806			$	1,095,806			$	1, 095,806			$	1,095,806
Total			$	1,151,960			$	56,154			$	16,523,440			$	22,167,272			$	14,020,010			$	14,730,866			$	14,020,010

(1)	Assumes that there is no earned but unpaid base salary at the time of termination.
(2)	Under our Chapter 11 Long-Term Incentive Plan, we must pay Mr. Hockema or his estate the remaining portion of the total amount accrued by Mr. Hockema thereunder on July 6, 2007 unless he is terminated by us for cause or he voluntarily terminates his employment (other than at normal retirement) prior to that date. The $1,649,440 amount reflected in the table is based on computations made in connection with the 2006 payments under the Chapter 11 Long-Term Incentive Plan and assumes no decrease in the number of plan participants or adjustment to the cost reduction pool prior to July 6, 2007.
(3)	Under our 2006 Short-Term Incentive Plan, Mr. Hockema’s target award for 2006 is $500,050, but his award can range from a threshold of $250,000 to a maximum of $1,500,150, or could be zero if the threshold performance is not achieved. The exact amount of Mr. Hockema’s award under our 2006 Short-Term Incentive Plan cannot be determined at this time. Pursuant to

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	Mr. Hockema’s employment agreement, we must pay Mr. Hockema or his estate any earned but unpaid amounts under our 2006 Short-Term Incentive Plan unless he is terminated by us for cause or he voluntarily terminates his employment other than for good reason. Under Mr. Hockema’s employment agreement, if his employment had terminated during 2006 but prior to December 31, 2006 Mr. Hockema’s target award for 2006 under our 2006 Short-Term Incentive Plan would have been prorated for the actual number of days of Mr. Hockema’s employment in 2006 and Mr. Hockema would have been entitled to payment of such amount, without any increase or reduction that would normally be considered with his award, unless his employment had been terminated by us for cause or had been voluntarily terminated by him other than for good reason; accordingly, assuming his employment had terminated on December 29, 2006, the last business day of 2006, we would have been obligated to pay Mr. Hockema $497,310 unless his employment had been terminated by us for cause or had been voluntarily terminated by him other than for good reason. Under Mr. Hockema’s employment agreement, if his employment had terminated on December 31, 2006, the last day of our 2006 fiscal year, Mr. Hockema would have been entitled to full payment of his award under the 2006 Short-Term Incentive Plan unless his employment had been terminated by us for cause or had been voluntarily terminated by him other than for good reason. Solely for purposes of this note, we estimate that Mr. Hockema’s award under our 2006 Short-Term Incentive Plan will be between $750,075 and $1,250,125 (with a midpoint of $1,000,000), before taking into account any adjustments for individual performance or applicable modifiers. We believe this is a reasonable estimate of the potential range of Mr. Hockema’s award based on our results through the third quarter of 2006.
(4)	Under our Chapter 11 Retention Plan, we must pay Mr. Hockema or his estate $365,000 on July 6, 2007 unless his employment is terminated by us for cause or is voluntarily terminated by him (other than at normal retirement) prior to that date.
(5)	Assumes that Mr. Hockema used all of his 2006 vacation and that he has four weeks of accrued vacation for 2007.
(6)	Under Mr. Hockema’s employment agreement, if Mr. Hockema’s employment is terminated by us without cause or is voluntarily terminated by him for good reason, we must make a lump-sum payment to Mr. Hockema in an amount equal to two times the sum of his base salary and target annual bonus opportunity for the fiscal year in which such termination occurs.
(7)	Under Mr. Hockema’s employment agreement, if Mr. Hockema’s employment is terminated by us without cause or is voluntarily terminated by him for good reason within two years following a change in control, we must make a lump-sum payment to Mr. Hockema in an amount equal to three times the sum of his base salary and target annual bonus.
(8)	Under Mr. Hockema’s employment agreement, if Mr. Hockema’s employment is terminated by us without cause or is voluntarily terminated by him for good reason, we must continue his medical and dental benefits for two years, or, if such termination occurs within two years following a change in control, three years, commencing on the date of such termination. The table reflects the present value of such medical and dental benefits at December 29, 2006 determined (a) assuming family coverage in a point of service medical plan and a basic dental plan, (b) based on current COBRA coverage rates for 2007 and assuming a 9% increase in the cost of medical coverage for 2008 as compared to 2007, an 8.5% increase in the cost of medical coverage for 2009 as compared to 2008 and a 6% increase in the cost of dental coverage for 2008 as compared to 2007 and for 2009 as compared to 2008, (c) assuming Mr. Hockema pays premiums for such coverage throughout the applicable benefit continuation period in the same manner as if he were an active employee, and (d) applying a discount rate of 5.75% per annum.
(9)	Under Mr. Hockema’s employment agreement, if Mr. Hockema’s employment is terminated by us without cause or is voluntarily terminated by him for good reason, we must continue his disability benefits for two years, or, if such termination occurs within two years following a change in control, three years, commencing on the date of such termination. The table reflects

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the present value of such disability benefits at December 29, 2006 determined (a) based on our current costs of providing such benefits and assuming such costs do not increase during the applicable benefit continuation period, (b) assuming we pay such costs throughout the applicable benefit continuation period in the same manner as we currently pay such costs, (c) assuming mortality according to the RP-2000 Combined Health mortality table published by the Society of Actuaries, and (d) applying a discount rate of 5.75% per annum.

(10)	Reflects the actuarial present value of Mr. Hockema’s disability benefits at December 29, 2006 determined (a) assuming full disability at December 29, 2006, (b) assuming mortality according to the RP-2000 Disabled Retiree mortality table published by the Society of Actuaries, and (c) applying a discount rate of 5.75% per annum.
(11)	Under Mr. Hockema’s employment agreement, if Mr. Hockema’s employment is terminated by us without cause or is voluntarily terminated by him for good reason, we must continue his life insurance benefits for two years, or, if such termination occurs within two years following a change in control, three years, commencing on the date of such termination. Mr. Hockema has declined life insurance coverage. Accordingly, we would not be obligated to provide Mr. Hockema with life insurance benefits for the applicable benefit continuation period.
(12)	No life insurance benefit would have been payable assuming Mr. Hockema’s death occurred on December 29, 2006 other than while traveling on company-related business. However, we maintain a travel and accidental death policy for certain employees, including Mr. Hockema, that would provide a $1,000,000 death benefit payable to Mr. Hockema’s estate if his death had occurred during company-related travel.
(13)	Under Mr. Hockema’s employment agreement, if any payments to Mr. Hockema would be subject to federal excise tax by reason of being considered contingent on a change in control, we must pay to Mr. Hockema an additional amount such that, after satisfaction of all tax obligations imposed on such payments, Mr. Hockema retains an amount equal to such federal excise tax. The table reflects an estimate of the additional amount that we would have been obligated to pay Mr. Hockema if his employment had been terminated on December 29, 2006 by us without cause or by him with good reason following a change in control on such date.
(14)	Reflects the aggregate market value of the shares of restricted stock for which restrictions would lapse early due to Mr. Hockema’s termination, determined based on a per share price of $55.98, the reported closing price for our common stock on the Nasdaq Global Market on December 29, 2006, which was the last trading day of 2006. The restrictions on all shares of restricted stock currently held by Mr. Hockema will lapse on July 6, 2009 or earlier if his employment terminates as a result of his death, disability or retirement, his employment is terminated by us without cause or his employment is voluntarily terminated by him for good reason, or if there is a change in control.
(15)	Under our New Restoration Plan, Mr. Hockema is entitled to a distribution of his account balance six months following his termination, except that he will forfeit the entire amount of matching and fixed rate contributions made by us to his account if he is terminated for cause.

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